By combining commonly used Protamine Sulfate (Pro) with superparamagnetic dextran coated iron oxide nanoparticle (SPIO) Ferumoxides (FE), a complex is formed that can be used to magnetically label stem cells and other mammalian cells. Cells take up FEPro complexes by macropinocytosis. Early detection of labeled cells in vivo by cellular MRI requires the development of novel pulse sequences or image processing to improve the sensitivity to low numbers of iron oxide labeled cells in tissues. We revise the current labeling method by using low dose of Pro and adding Fe and Pro directly to the cells before generating any FePro complexes. Human tumor glioma (U251) and human monocytic leukemia cell (THP-1) lines were used as model systems for attached and suspension cell types, respectively and dose dependent (Fe 25 to 100g/ml and Pro 0.75 to 3g/ml) and time dependent (2 to 48h) labeling experiments were performed. Labeling efficiency and cell viability was assessed of these cells. Prussian blue staining revealed that more than 95 % of cells were labeled. Intracellular iron concentration in U251 cells reached 35pg-iron/cell at 24h when labeled with 100g/ml of Fe and 3g/ml of Pro. However, comparable labeling was observed after 4h across the described FePro concentrations. Similarly, THP-1 cells achieved 10pg-iron/cell at 48h when labeled with 100g/ml of Fe and 3g/ml of Pro. Again, comparable labeling was observed after 4h for the described FePro concentrations. FePro labeling did not significantly affect cell viability. To validate and to determine the effectiveness of the revised technique, human T-cells, human hematopoietic stem cells (hHSC), human bone marrow stromal cells (hMSC) and mouse neuronal stem cells (mNSC C17.2) were labeled. Labeling for 4 hours using 100g/ml of Fe and 3g/ml of Pro resulted in very efficient labeling of these cells, without impairing their viability and functional capability. The new technique with short incubation time using 100g/ml of Fe and 3g/ml of Pro is effective in labeling cells for cellular MRI. We have also investigated the factors responsible for migration and homing of magnetically labeled CD 34 CD 133+ hematopoietic stem cells at the sites of active angiogenesis in tumor. CD133+ cells labeled with PEFro were mixed with either rat glioma or human melanoma cells and implanted in flank of nude mice. MRI of the tumors including surrounding tissues was performed. Tumor sections were stained for Prussian blue (PB), PDGF, HIF-1&#945;, SDF-1, MMP-2, VEGF and endothelial markers. MRIs demonstrated hypointense regions at the periphery of the tumors where the PB+/AC133+ cells were positive for endothelial cells markers. At sites of PB+/CD133+ cells, both HIF-1&#945; and SDF-1 were strongly positive and PDGF and MMP-2 showed generalized expression in the tumor and surrounding tissues. There was no significant association of PB+CD133+ cells localization and VEGF expression in tumor cells. Western blot demonstrated strong expression of the SDF-1, MMP-2 and PDGF at the peripheral parts of the tumors. HIF-1&#945; was expressed at both the periphery and central parts of the tumor. This work demonstrated that magnetically labeled cells maybe used as probes for MRI and histological identification administered cells. We also addressed the issue of what happens to exogenous label such as FEPro or bromodeoxyuridine (BrdU) or green fluorescent protein (GFP) in stem cells following direct injection into tissues. Direct implantation of cells into target tissue can result in >80% cell death due to trauma or apoptosis. Bystander uptake of labeled cells by activated macrophages (AM) can confound the interpretation of results. We also determined the percentages of tissue macrophages (TM) that took up SPION, BrdU or GFP from labeled bone marrow stromal cells (BMSCs) that were placed into areas of angiogenesis and inflammation in a mouse model known as Matrigel plaque perfusion assay. Cells recovered from digested plaques at various time points were analyzed by fluorescence microscopy and flow cytometry. The analysis of harvested plaques revealed 5% of BrdU+, 5-10% of GFP+ and 5-15% of dextran+ macrophages. The transfer of the label was not dependent on cell dose or viability. Collectively, this study suggests that care should be taken to validate donor origin of cells using an independent marker by histology and to assess transplanted cells for TM markers prior to drawing conclusions about the in vivo behavior of transplanted cells.